SARO 10-K & 10-Q changes, risk factors and insider trading

A reduction in flight activity of aircraft and changes in customer travel patterns both in the United States and abroad has resulted in and may continue tocould result in reduced demand for aftermarket services, which we experienced during the height of the COVID-19 pandemic in 2020 and 2021.services. A deteriorating airline environment may also result in commercial airlines deciding to retire some of the aircraft that use engine platforms that we service, excess capacity in the aftermarket and increased competition for aftermarket service work and additional airline bankruptcies, and in such circumstances, we may not be able to fully collect outstanding accounts receivable. Reduced demand from customers caused by economic conditions, including tight credit conditions and customer bankruptcies, may adversely impact our financial condition or results of operations. In addition, weak national and local economic conditions, or changes in owner or operator fees or taxes by the Federal Aviation Administration (the “FAA”) or tax incentives by the U.S. Internal Revenue Service (the “IRS”), may contribute to a decline in the demand for business jet transportation, and thus would reduce the requirements for aftermarket services in the business aviation industry.

A portion of our revenue is derived from contracts, directly or indirectly, with the U.S. military that are subject to U.S. government contracting rules and regulations. A decline in the level of operational activity of the U.S. military or decreases in budget, spending or outsourcing by the U.S. military end-users could adversely affect our business, results of operations and financial condition. The demand for our aftermarket services in the military market is significantly dependent upon government budget trends, particularly the U.S. Department of Defense (“DoD”) budget. Services to our military end-users accounted for $993.4$1,081.0 million, or 19.0%,17.8%, of our revenue for the year ended December 31, 2024,2025, and $899.2$993.4 millionmillion, or 19.6%19.0% of our revenue for the year ended December 31, 2023.2024. U.S. federal law currently prevents U.S. military departments and agencies from using more than 50% of their funding for depot-level maintenance of core assets ofon outsourced work without a waiver from the Secretary of Defense, which impacts the size of the overall market for our services. Additionally, the retirement of mature aircraft from the U.S. military may decrease the need for our aftermarket services. Defense spending by United States, Canadian, European and other governments worldwide has fluctuated in recent years, at times resulting in reduced demand for our services. Growth in revenue to our military customers depends upon continued outsourcing by military end-users of certain aftermarket service functions to the civil industrial base.

Our business depends on maintaining a sufficient supply of parts, components and raw materials to meet our customers’ demands and maintain the operation of our business and services. Global supply chain and labor markets are continuing to experience high levels of disruption, includingsuch recentas disruptionthat caused by attacks on commercial vessels in the Red Sea, causing significant materials and parts shortages, as well as demurrage, delivery delays, labor shortages, energy cost increases and freight price increases. Current geopolitical conditions, including sanctions andsanctions, other trade restrictive actions and strained intercountry relations, are contributing to these issues. These issues could lead to significant supplier performance failures and delays. Disruptions to our supply chain and business operations, or to our suppliers’ supply chains and business operations, could have adverse effects on our ability to provide aftermarket support and services to our customers and, thus, could adversely affect our business, results of operations and financial condition.

In particular, we source the materials, parts and components for our business from Original Equipment ManufacturesOEMs and material suppliers. Our authorizations from OEMs often require that we purchase component parts from the OEMs or their designated distributors. Our business, therefore, could be adversely impacted by factors affecting our OEMs and other suppliers (such as the destruction of our suppliers’ facilities or their distribution infrastructure, including damage or disruption by external factors, including wars or other conflicts, terrorism, weather-related events (including due to climate change), acts of God, natural disasters or other similar events, a work stoppage or strike by our suppliers’ employees or the failure of our suppliers to provide materials of the requisite quality), or by increased costs of such raw materials or components if we were unable to pass along such price increases to our customers.

For the yearyears ended December 31, 20242025 and the year ended December 31, 2023,2024, our four largest parts suppliers, which consisted of OEMs, accounted for a substantial majority of our total parts purchases. If we were to lose a key supplier or were unable to obtain the same levels or quality of deliveries from these suppliers and were unable to supplement those purchases with products obtained from other suppliers, it could adversely affect our business, results of operations and financial condition. In addition, if our key suppliers increase the prices of their products, it would negatively affect our operating results if we were not able to pass these price increases through to our customers, which could lead to decreased sales, profit margins and earnings.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or consolidated financial statements will not be prevented or detected on a timely basis. As we have previously been a privately held company, we were not subject to the rules and regulations of the SEC regarding compliance with Section 404 of the Sarbanes-Oxley Act (“Section 404”), to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. In connection with the preparation of our consolidated financial statements for the yearsyear ended December 31, 2024,2025, we identified material weaknesses in our internal control over financial reporting. The following are our material weaknesses:

We did not design and maintain (i) an effective control environment commensurate with our financial reporting requirements,requirements. specifically,Specifically, we did not maintainlacked a sufficient complement of personnel with an appropriate level of internal controls and accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely and accurately,accurately. (ii)Additionally, anwe effectivedid risk assessment process at a sufficiently precise level to identify new and evolving risks of material misstatement in our financial statements andnot design and implement changes to our controls in response to those risks, (iii)maintain effective monitoring controls to verify the proper and consistent functioning of our internal controls, and (iv) effective information and communication controls between various functions within the company to verify complete and accurate financial reporting. These material weaknesses contributed to the following additional material weaknesses:controls.

We did not design and maintain adequate written policies and procedures for accounting and financial reporting. Further, we did not design and maintain effective controls related to the period-end financingfinancial reporting process and significant account balances, including ensuring that there is adequate documented evidence of a sufficient level of management review over complex estimates and judgmental areas of accounting and financial reporting.

We are subject to income taxes in the United States and various non-U.S. jurisdictions. Our domestic and international tax liabilities are dependent upon the location of earnings among these different jurisdictions. Our future results of operations could be adversely affected by changes in our effective tax rate as a result of changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets, challenges by tax authorities or changes in tax laws or regulations. From time to time, changes in tax laws or regulations may be proposed or enacted that could adversely affect our overall tax liability. There can be no assurance that changes in tax laws or regulations, both within the United States and the other jurisdictions in which we operate, such as the 15% global minimum tax under the Organisation for Economic Co-operation and Development Pillar Two, Global Anti-Base Erosion Rules (the “Pillar Two Rules”), will not materially and adversely affect our effective tax rate, tax payments, financial condition and results of operations. As of December 31, 2024,2025, among the jurisdictions in which we operate, only the United KingdomStates andhas France havenot enacted legislation adopting the Pillar Two Rules,Rules. effectiveFurthermore, On January 5, 2026, the OECD released a “side-by-side” package that generally establishes an exemption for U.S. multinationals from the global 15% minimum tax. However, implementation of the package depends on domestic legislation and regulation in fiscalOECD 2025.member countries and is subject to subsequent review.

Further, the sophistication, availability and use of artificial intelligence by threat actors present an increased level of risk. As a result, we and certain of our third-party providers regularly experience cyberattacks and other incidents, and we expect to continue to experience more frequent and increasingly advanced cyberattacks in varying degrees. We cannot guarantee that these will not have a material impact on our operations or financial results. Additionally, in some cases, we must rely on the safeguards put in place by our customers, suppliers, vendors and other third parties to protect against and report cyberattacks. We could potentially be subject to production downtimes, operational delays, other detrimental impacts on our operations or ability to provide products and services to our customers, the compromise of our IT Systems or Confidential Information, misappropriation, destruction or corruption of data, security breaches, other manipulation or improper use of our or third-party systems, networks or products, financial losses from remedial actions, loss of business, or potential liability, penalties, fines and/or damage to our reputation. Any of these could have a material adverse effect on our competitive position, results of operations, financial condition or liquidity. Due to the evolving nature of such risks, the impact of any potential incident cannot be predicted. Any adverse impact to the availability, integrity or confidentiality of our IT Systems or Confidential Information can result in legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties, negative reputational impacts that cause us to lose existing or future customers, and/or significant incident response, system restoration or remediation and future compliance costs. AnyFor orexample, allwe ofare required to disclose material cybersecurity incidents pursuant to disclosure rules promulgated by the foregoingSEC. Any public disclosure relating to a material cybersecurity incident could harm our reputation, result in litigation and adversely affect our business, results of operations and financial condition. Finally, we cannot guarantee that any costs and liabilities incurred in relation to an attack or incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all.

In addition, we are subject to domestic and international cybersecurity-related laws and regulations, alongside government, customer and other cyber and security requirements. The scope and breadth of these requirements have expanded our compliance obligations, and cybersecurity regulatory enforcement activity has grown. We expect the regulatory environment and compliance requirements, including the application and interpretation of such requirements, to continue to evolve, and staying apace with these regulatory changes could require us, our suppliers and our business partners to modify existing practices, increase operational and compliance expenditures, and incur new or additional information technology and product development expenses. Given that compliance with such requirements and regulatory changes can take time, it is possible that our practices may not at all times comply fully or partially with all applicable requirements. For example, certain of the Company’s contracts are subject to the Cyber security and IT controls requirements of Defense Federal Acquisition Regulation Supplement (“DFARS”) for the protection of “covered defense information” (as that term is defined in DFARS 252.204-7012 and DFARS 252.204.-7020). Additionally, as a contractor to the DoD, we must comply with the controls outlined in the National Institute of Standards and Technology Special Publication 800-171, itsthe DoD's assessment reporting requirements and/or the DoD’s specific agency cybersecurity requirements.

Furthermore, we will becomeare subject to enhanced requirements, including potential Cybersecurity Maturity Model Certification (“CMMC”) assessments and/or certifications as definedas inof 32November CFR Part 170 program rule, later in10, 2025 oncewhen the 48 CFR CMMC acquisition rule isbecame approved.effective. Depending on the U.S. DoD agency and type of contract, we might be required to receive specific third-party cybersecurity certifications to be eligible for contract awards. Any failure to comply with these requirements could restrict our ability to bid for, be awarded and/or perform on DoD contracts. The DoD expects that all new contracts will be required to comply with the CMMC by 2026, and initial requests for information and for proposal have already begun.CMMC. To the extent we, or our subcontractors or other third parties on whom we rely, are unable to achieve certification in advance of contract awards that specify the requirement, we may be unable to bid on contract awards or follow-on awards for existing work with the DoD, which could materially and adversely affect our results of operations, financial condition, business and prospects. We will also be required to go through a recertification process periodically, which may increase our costs of compliance relating to such certification and may cause operational delays. In addition, any obligations that may be imposed on us under the CMMC may be different from or in addition to those otherwise required by applicable laws and regulations, which may cause additional expense for compliance. Further, as a United Kingdom government contractor, we are required to demonstrate our Cyber Essentials Certification on an annual basis. Due to our current contracts with the Australian Government, we must also comply with the eight cybersecurity controls outlined by the Australian Cyber Security Center (ACSC) Essential Eight framework. ActualComplying with such numerous and complex regulations in the event of an incident could be expensive and difficult. Any actual or perceived non-compliance with such requirements could result in reputational, litigation and financial risks, losses and liabilities under our current contracts and adversely impact the prospects for certain new ones.

We and our vendors are subject to a variety of federal, state and foreign data privacy laws, rules, regulations, industry standards and other requirements, including those that apply generally to the handling of information about individuals, and those that are specific to certain industries, sectors, contexts, or locations. These requirements, and their application, interpretation and amendment are constantly evolving and developing. For example, in the United States, the Federal Trade Commission and state regulators enforce a variety of data privacy issues, such as promises made in privacy policies or failures to appropriately protect information about individuals, as unfair or deceptive acts or practices in or affecting commerce in violation of the Federal Trade Commission Act or similar state laws. In addition, certain states have adopted new or modified privacy and security laws and regulations that may apply to our business. For example, the California Consumer Privacy Act (“CCPA”) requires covered businesses that process personal information of California residents (including residents acting in an employment and business-to-business capacity) to, among other things: provide certain disclosures to California residents regarding the business’s collection, use and disclosure of personal information; receive and respond to requests from California residents to access, delete and correct their personal information, or to opt-out of certain disclosures of their personal information; and enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf. The CCPA is enforceable by the California Attorney General and a new, additional enforcement bureau, the California Privacy Protection Agency. The California Privacy Protection Agency is continuously amending the CCPA regulations, building upon the requirements in the CCPA, including with respect to cybersecurity audits, automated decision‑making and risk assessments. In the event of an actual or perceived violation of the CCPA, these regulators could seek severe statutory damages, injunctive relief or agreed settlements providing for ongoing audit and reporting requirements. There is also a private right of action relating to certain data security incidents. We cannot yet fully predict the impact of the CCPA or subsequent guidance on our business or operations, however, the effects are potentially significant, especially for companies that provide services like ours, and could have an adverse effect on our business, results of operations, and financial condition. The CCPA has required and will likely continue to require us to modify our data collection or processing practices and policies or our business model and to incur substantial costs and expenses in an effort to comply and increase our potential exposure to regulatory enforcement and/or litigation.litigation, which could have an adverse effect on our business, results of operations, and financial condition.

The enactment of the CCPA has also prompted a wave of newcomprehensive legislationprivacy laws in a number of U.S. states, with even more states whichconsidering their own laws, creating a patchwork of overlapping, but different state laws. These laws are similar to the CCPA, but also impose, or hashave the potential to impose, additional obligations on companies that collect, store, use, retain, disclose, transfer and otherwise process confidential, sensitive and personal information, and will continue to shape the data privacy environment nationally. State lawsThere are changing rapidly, creating a patchwork of overlapping, but different, state laws. There is also discussionefforts in Congress ofworking aon new federal data protection and privacy lawframeworks to which we may become subject if it is enacted. Such legislation will likely add additional complexity, variation in requirements, restrictions and potential legal risk, and require additional investment in resources to compliance programs, could impact strategies and availability of previously useful data and could result in increased compliance costs and changes in business practices and policies. Further, in order to comply with the varying state laws around data breaches, we must maintain adequate security measures, which require significant investments in resources and ongoing attention.

In particular, we are subject to data protection laws in Europe including the General Data Protection Regulation 2016/679 and the United Kingdom General Data Protection Regulation and Data Protection Act of 2018 as amended from time to time (collectively, the “GDPR”), which impose stringent data protection obligations for processors and controllers of personal data with the risk of enforcement action, civil claims (including class actions), significant penalties or requirements for us to cease or change how we process personal data and conduct our business.

Applicable requirements regarding data privacy and the processing of information in the United States, Europe and other jurisdictions, and the application and interpretation of such requirements, are continuously evolving and subject to potentially differing interpretations, which increases the complexity of compliance and has required, and may require in the future, us to modify our practices, implement a variety of compliance measures, and incur compliance-related costs and expenses. It is also possible that we could become subject to a regulatory inquiry or investigation and be required to take additional compliance steps or incur costs in remediating any identified issues. We arecontinue currentlyto in the process of developingdevelop and updatingupdate our policies, procedures and data transfer mechanisms in accordance with requirements under applicable data privacy and protection laws and regulations. Additionally, as these requirements may be inconsistent from one jurisdiction to another or conflict with other rules or our practices, our practices may not have complied or may not comply in the future with all such laws, regulations, requirements and obligations.

Furthermore, the regulatory framework around the development and use of emerging artificial intelligence (“AI”) technologies is rapidly evolving, and many federal, state and foreign government bodies and agencies have introduced or are currently considering additional laws and regulations related to AI, machine learning, large language models, and additional emerging data technologies. Already, certain existing legal regimes (e.g., relating to data privacy) regulate certain aspects of AI technologies, and new laws regulating AI technologies have entered into force in the EU and United States. For example, in Europe, on August 1, 2024, the EU Artificial Intelligence Act (the “EU AI Act”) entered into force and establishes a comprehensive, risk-based governance framework for artificial intelligenceAI in the EU market. The majority of the EU AI Act’s substantive requirements, such as transparency, conformity assessments and monitoring, risk assessments, human oversight, security and accuracy, will apply from August 2, 2026, and will impose penalties of between 3% and 7% of an undertaking’s worldwide annual turnover. Additionally, in the United States, legislation related to AI technologies have been the subject of executive orders under both the Biden and Trump administrations, and legislation has also been introduced at the federal level and enacted or passedproposed at the state level.level Suchas well, including in California, Colorado and Texas. Some enacted or proposed frameworks include requirements focused on transparency, risk-management and accountability for AI technologies, while others focus on high-risk uses of AI, the use of automated decision-making technology or companies that are developers or deployers of AI technologies We expect more laws focused on the development and deployment of AI technologies to be passed in the future, which will create more compliance requirements and potentially differing requirements across different jurisdictions in which we operate. Furthermore, the Trump administration’s approach to investment in and regulation of AI technologies has and is expected to continue to deviate from that of the previous administration and we will need to adapt to any changes that may result from such approach, including as the result of new or changing executive orders. For instance, the federal government may seek to pre-empt state laws when they seek to govern certain topics, as evidenced by the Trump administration’s “Ensuring a National Policy Framework for Artificial Intelligence” Executive Order signed on December 11, 2025. This order calls for federal standards and legislation that would preempt conflicting state AI regulations and create a federal litigation task force focused on challenging state AI laws in court. The cost to comply with such laws, regulations, or decisions and/or guidance could be significant and would increase our operating expenses (such as by imposing additional regulationsreporting mayobligations regarding our use of AI technologies), which could impact our ability to develop, use, procureuse and commercialize AI software or other AI technologies in the future and require us to expend significant resources to modify our products, services, or operations to ensure compliance or remain competitive.future.

Moreover, it is possible that new laws, regulations and other requirements, or amendments to or changes in interpretations of existing laws, regulations and other requirements, may require us to incur significant costs, implement new processes, or change our handling of information and business operations. For example, the EU Data Act came into effect on September 12, 2025, and introduces rules regarding access to product data generated from the use of connected products and their related services, which includes making product data accessible to the user free of charge. Where the EU Data Act applies, non-compliance can result in regulatory enforcement and fines, civil claims, and reputational damage. In addition, any failure, or perceived failure, by us to comply with any U.S. federal, state or foreign privacy, processing of personal information, consumer protection or e-marketing related laws, regulations, standards or other requirements to which we may be subject or other legal obligations relating to these matters, any regulatory inquiry, or any significant data breach, could adversely affect our reputation, brand and business, result in claims, investigations, proceedings or actions against us by individuals, consumer rights groups, private and public customers, governmental regulatory entities or others or other penalties or liabilities, or require us to change our operations and/or cease using certain data sets. We could incur significant costs in responding to any inquiries or investigating and defending such claims, investigations, proceedings or actions and, if found liable, pay significant damages or fines or be required to make changes to our business. Further, these proceedings and any subsequent adverse outcomes may subject us to significant negative publicity and an erosion of trust. If any of these events were to occur, our business, results of operations and financial condition could be adversely affected.

The United States has recently enacted and proposed to enact significant new tariffs. Additionally, President Trump has directed various federal agencies to further evaluate key aspects of U.S. trade policy and there has been ongoing discussion, commentary and actions regarding potential significant changes to U.S. trade policies, treaties and tariffs. Effective March 4, 2025, the U.S. implemented a 25% additional tariff on imports from Canada (subject to certain exceptions for energy or energy resources) and Mexico, and a 20% additional tariff on imports from China. In response to these tariffs, Canada has proposed retaliatory tariffs, including on aerospace products, of 25%. On March 6, 2025, the Trump Administration announced that Canadian and Mexican goods covered by the U.S.-Mexico-Canada Agreement would not be subject to the additional 25% tariff until April 2, 2025. As of the date of this Annual Report, discussions remain ongoing in respect of certain trade restrictions and tariffs on imports from Canada, China and Mexico, as well as retaliatory tariffs enacted in response to such actions. In light of these events, thereThere continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties and tariffs.tariffs under President Trump’s administration. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States. Any of these factors could depress economic activity and restrict our access to suppliers or customers and have a material adverse effect on their business, financial condition and results of operations, which in turn would negatively impact us. We have operations, customers and suppliers in the U.S., Canada and other countries and regularly import and export goods and services to and from those countries. An increase in tariffs could have a material impact on our costs and on the demand for our products and services.

We must comply with various laws and regulations relating to the export of products, services and technology and the economic and trade sanctions and other laws and regulations imposed, administered and enforced by the United States and other countries having jurisdiction over our operations. In the United States, these laws include, among others, the U.S. Export Administration Regulations (“EAR”) administered by the U.S. Department of Commerce, the U.S. Department of Labor, theCommerce's, Bureau of Industry and Security, the International Traffic in Arms Regulations (“ITAR”) administered by the U.S. Department of State, theState's Directorate of Defense Trade Controls (“DDTC”) and the economic and financial sanctions and trade embargoes administered by the U.S. Department of the Treasury,Treasury's Office of Foreign Assets Control (“OFAC”) or the U.S. Department of State. Certain of our products have military or strategic applications and are on the munitions list of the ITAR or representare so-called “dual use” items governed by the EAR. As a result, these products require individual validated licenses in order to be exported to certain jurisdictions. In addition, we must maintain a registration with DDTC under the ITAR. Sanctions laws and regulations, including those administered by OFAC, generallymay restrict or prohibit (unless authorized by relevant authorities) transactions or other business with certain countries or territories and individuals and entities that are targeted by sanctions, including those areas subject to U.S. trade embargoes (currently Cuba, Iran, Syria, North Korea, the Crimea region of Ukraine, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic) and individuals and entities listed on Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List, as well as similar lists maintained by relevant regulators. Any failures to comply with these export controls and sanctions laws and regulations could result in civil or criminal penalties, fines, investigations, adverse publicity and restrictions on our ability to export our products, and repeat failures could carry more significant penalties, including the loss of export privileges. Any changes in export controls or sanctions or laws or regulations may further restrict the export of our products or the services that we may provide. Any restrictions on the export of our products or product lines, or on the services that we provide, could adversely affect our business, results of operations and financial condition.

We are monitoring the ongoing conflicts between Israel and Hamas and between Russia and Ukraine and the related export controls and financial and economic sanctions imposed on certain industry sectors, including the aviation sector, and parties in Russia by the United States, the United Kingdom, the European Union and others. Although the conflicts havehad not, nor are expected to,to havehave, a direct material adverse impact on our business, the implications of the Israel and Hamas and Russia and Ukraine conflicts in the short-term and long-term are difficult to predict at this time. Factors such as increased energy costs, the availability of certain raw materials for engine components, parts and accessories, embargoes on flights from certain airlines, sanctions on certain individuals and companies, and the stability of certain customers could impact the global economy and aviation sector.

Given the nature of our business and the industries we serve, we must anticipate and respond to market, technological, regulatory and other changes driven by broader trends related to greenhouse gas emission reduction efforts in response to climate change and energy security concerns. These changes present risks for our business, which provides services to customers in the aviation sector that have historically been carbon-intensive, and we expect will remain important to efforts globally to lower greenhouse gas emissions. In the aerospace industry, greenhouse gas emission reduction over time may require a combination of continued technological innovation in the fuel efficiency of engines, expanded use of sustainable aviation fuels and the further development of hybrid-electric and electric flight and hydrogen-based aviation technologies. The risk of insufficient availability of low- carbonlow-carbon fuels (such as sustainable aviation fuels or hydrogen) may compromise the pace and degree of emission reduction within the aviation sector. Our success in advancing greenhouse gas emission reduction objectives across our business will depend in part on our actions, the actions of governments, regulators and other market participants to invest in infrastructure, create appropriate market incentives and to otherwise support the development of new technologies. The process of developing new high-technology products and enhancing existing products to mitigate climate change is often complex, costly and uncertain, and we may pursue strategies or make investments that do not prove to be commercially successful in the time frames expected or at all.

Investors, employees, customers, governmental and regulatory bodies and other stakeholders are increasingly focused on companies’ performances on a variety of sustainability and ESG matters, among other topics, which are considered to contribute to the long-term sustainability of companies’ performances. A variety of organizations measure the performances of companies on ESG topics, and the results of these assessments are widely publicized. In addition, investment in funds that specialize in companies that perform well in such assessments are increasingly popular, and major institutional investors have publicly emphasized the importance of ESG measures to their investment and voting decisions, with some relying on proprietary or third-party ESG ratings to measure performances of companies on ESG parameters. Topics taken into account in such assessments include, among others, climate change, environmental impacts, employee engagement, human and labor rights, responsible sourcing, low carbon transition, sustainability transparency, responsible use of artificial intelligence, the role of the board of directors in supervising various ESG issues and broader governance issues.

In addition, various regulatory authorities have imposed, and may continue to impose, mandatory substantive and/or disclosure requirements with respect to ESG matters that could otherwise materially impact our business and operations. For example, the SEC finalized rules that will require companies to provide certain climate-related disclosures, including with regards to greenhouse gas emissions and certain climate-related financial statement metrics. We are still assessing the scope and impact of these rules given how recently they were adopted, the subsequent legal challenges against the rules, and the expectation that the Trump Administration will not enforce the rules. Wewe may also be subject to the newly adopted climate-related laws from the State of California that will require in-scope entities to disclose their greenhouse gas emissions, provide a climate-related financial risk report, as well as,as for entities that market, sell, purchase, or use voluntary carbon offsets and/or make certain claims regarding the reduction of greenhouse gas emissions, or publish information about the offsets and/or reduction claims annually on their website. Other state legislatures have considered similar or conflicting rules. We may also be subject to, or indirectly impacted by, the requirements of the European Union’s sustainability reporting directives and related Taxonomy Regulation. In addition, we may be subject to International Sustainability Standards Board’s sustainability and climate-related disclosure standards, as various countries have adopted or have indicated their intent to incorporate, account for or otherwise adopt such standards as law, including the United Kingdom, Canada, Japan, Singapore, China, Australia and Kenya. Further, we may be impacted by carbon taxes and renewable energy and fuels utilization mandates implemented across our operating jurisdictions, as well as our suppliers and customers, which might increase operational costs and procurements costs, negatively impacting our business. Any of the foregoing may require us to make additional investments in facilities and equipment, require us to incur additional costs for the collection of data and/or preparation of disclosures and associated internal controls, may impact the availability and cost of key raw materials used in the production of our products,materials, and, in turn, may adversely affect our business, results of operations and financial condition. Moreover, these requirements may not always be uniform across jurisdictions, which may result in increased complexity, and cost, for compliance. Additionally, many of our suppliers, customers and business partners may be subject to similar requirements, which may augment or create additional risks, including risks that may not be known to us.

In light of regulators’ and other stakeholders’ focus on sustainability and ESG matters, there can be no certainty that we will manage such issues successfully, or that we will successfully meet society’s various expectations as to our proper role or our own sustainability and ESG goals and values. This could lead to risks of litigation or reputational damage relating to our ESG policiespolicies, goals or performance. As we continue to focus on developing ESG practices, and as investor and other stakeholder expectations, voluntary and regulatory ESG disclosure standards and policies continue to evolve, we have made disclosures in these areas. Such disclosures may reflect aspirational goals, targets and other expectations and assumptions, which are necessarily uncertain and may not be realized. FailureCertain anti-ESG advocates have brought legal challenges regarding corporate sustainability initiatives and goals, and to the extent we are subject to such challenges, it may require us to incur costs or otherwise adversely impact our business. Conversely, failure to realize (or timely achieve progress on) such aspirational goals and targets could adversely affect our reputation, customer attraction and retention and access to capital, expose us to reputational, regulatory or litigation risks or otherwise adversely affect our business, results of operations and financial condition.

We maintain defined benefit pension plans covering employees who meet age and service requirements. Assets available to fund the pension obligations of one of our two U.K. defined benefit plans werewas underfunded as of December 31, 2023.2025. If we have underfunded pension plans in the future, we may need to make additional cash contributions to these plans, and this could divert resources from our operations and may adversely affect our business, results of operations and financial condition. In the event we need to make additional cash contributions to these plans in the future, this will divert resources from our operations and may adversely affect our business, results of operations and financial condition.

increasing our vulnerability to general adverse economic and market conditions, including inflationinflation, andthe risk of rising interest rates and tariffs;

Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would materially and adversely affect our business, financial position and results of operations and our ability to satisfy our debt obligations. Additionally, if we cannot make scheduled payments on our debt, we will be in default under the New Credit Agreement. Such a default, if not cured or waived, may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt that is subject to an applicable cross-acceleration or cross-default provision. In addition, an event of default under the New Credit Agreement would permit the lenders under the New Senior2024 SecuredRevolving Credit FacilitiesFacility to terminate all commitments to extend further credit under the New Senior Secured Credit Facilities. Furthermore, if we were unable to repay the amounts due and payable under the New Senior Secured Credit Facilities, thosethe lenders thereunder could proceed against the collateral securing suchthe indebtedness,indebtedness owing under our New Credit Agreement, including our available cash.

A breach of thea covenantscovenant under the New Credit Agreement could result in an event of default under the applicable indebtedness.thereunder. Such a default, if not cured or waived, may allow the creditorslenders under the New Senior Secured Credit Facilities to accelerate the relateddebt debtin respect thereof and may result in the acceleration of any other debt that is subject to an applicable cross-acceleration or cross-default provision. In addition, an event of default under the New Credit Agreement would permit the lenders under the New Senior2024 SecuredRevolving Credit FacilitiesFacility to terminate all commitments to extend further credit under the New Senior2024 SecuredRevolving Credit Facilities.Facility. Furthermore, if we were unable to repay the amounts due and payable under the New Senior Secured Credit Facilities, thosethe lenders thereunder could proceed against the collateral securing suchthe indebtedness,indebtedness owing under our New Credit Agreement, including our available cash.

Borrowings under the New Senior Secured Credit Facilities are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed may remain the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease. As of December 31, 2024,2025, assuming that the New Senior Secured Credit Facilities were fully drawn, each 1 percentage point change in interest rates would have resulted in a change of approximately $30.0 million in annual interest expense on the indebtedness under the New Senior Secured Credit Facilities. We have entered into, and may in the future enter into, interest rate swaps that involve the exchange of floating for fixed rate interest payments in order to reduce interest rate volatility. However, it is possible that we will not maintain interest rate swaps with respect to any of our variable rate indebtedness. Alternatively, any swaps we have entered into, or may enter into in the future, may not fully or effectively mitigate our interest rate risk.

WeCarlyle areowns controlleda bysignificant Carlyle,amount whoseof our voting power, and their interests in our business may be different than yours.

As of January 29, 2026 Carlyle owns approximately 62.8%31.4% of our common stock. Pursuant to the Stockholders Agreement, Carlyle has the right to designate eight of our nine directors and will continue to have the right to designate a majority of our directors until it owns less than 25% of our outstanding shares of common stock. As a result, Carlyle or its nominees to the board of directors will have the ability to strongly influence or effectively control the appointment of our management, the entering into of mergers, sales of substantially all of our assets and other extraordinary transactions and influence amendments to our certificate of incorporation. So long asAlthough Carlyle continuesno tolonger ownowns a majority of our common stock, they will have the ability to controlstrongly influence the vote in any election of directors and willcould have the ability to prevent any transaction that requires stockholder approval regardless of whether others believe the transaction is in our best interests. In any of these matters, the interests of Carlyle may differ from or conflict with the interests of our other stockholders. Moreover, this concentration of stock ownership may also adversely affect the trading price for our common stock to the extent investors perceive disadvantages in owning stock of a company with a controllinglarge stockholder. In addition, the price of our common stock may be volatile due to a smaller public float.

We have historically paid Carlyle an annual fee for certain advisory and consulting services pursuant to ana advisoryconsulting services agreement. In connection with our IPO, the consulting services agreement was amended and restated and is continuing in full force and effect until the earlier of the second anniversary of the consummation of the IPO and the date on which Carlyle Investment Management L.L.C. and its affiliates collectively and beneficially own, directly or indirectly, less than 10% of our outstanding common stock. In addition, Carlyle is in the business of making investments in companies and may, from time to time, acquire interests in businesses that directly or indirectly compete with our business, as well as businesses that are significant existing or potential customers. Carlyle may acquire or seek to acquire assets that we seek to acquire and, as a result, those acquisition opportunities may not be available to us or may be more expensive for us to pursue.

Since May 2025, Carlyle no longer owns a majority of our common stock. As a result, we are no longer a “controlled company” within the meaning of the corporate governance standards of the NYSE and the rules of the SEC. UnderHowever, theseeven rules,though awe companyare ofno which more than 50% of the voting power is held by an individual, group or another company islonger a “controlled companycompany,” we continue to qualify for, and may rely on, exemptions from certain corporate governance requirements that would otherwise provide protection to stockholders of other companies during a one-year transition period concluding in May 2026. During this one-year transition period, we may elect not to comply with certain corporate governance requirements, including:

We maydo not currently and do not intend to rely on somethe orexemptions alllisted above, however we may elect to rely on certain of these exemptions foruntil sothe longconclusion asof wethe remainone-year atransition “controlledperiod company.”in May 2026. As a result, in the future, our board of directors and those committees may have more directors who do not meet the NYSE’s independence standards than they would if those standards were to apply. The independence standards are intended to ensure that directors who meet those standards are free of any conflicting interest that could influence their actions as directors. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE.

granting to our board of directors the sole power (subject to the rights of holders of any series of preferred stock or rights granted pursuant to the Stockholders Agreement) to fill any vacancy on the board of directors, except that (i) for so long as Carlyle beneficially owns at least 40% of the voting power of our common stock, any vacancies on the board of directors may also be filled by the stockholders and (ii) for so long as the Stockholders Agreement remains in effect, Carlyle will have the right to fill any vacancy resulting from the death, removal or resignation of a director designated by Carlyle as long as Carlyle continues to have the right to designate such director position;

prohibiting stockholder action by written consent (and, thus, requiring that all stockholder actions be taken at a meeting of our stockholders) if Carlyle ceases to beneficially own at least 40% of the voting power of our common stock;

establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at annual stockholder meetings; and requiring the approval of the holders of at least two-thirds of the voting power of all outstanding stock entitled to vote thereon, voting together as a single class, to amend or repeal our amended and restated certificate of incorporation or amended and restated bylaws if Carlyle ceases to beneficially own at least 40% of the voting power of our common stock.bylaws.

Section 203 of the DGCL prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder, generally a person, individually or together with any other interested stockholder, who owns or within the last three years has owned 15% of our voting stock, unless the business combination is approved in a prescribed manner. We have elected to opt out of Section 203 of the DGCL; however, our amended and restated certificate of incorporation will containcontains a provision that is of similar effect, except that it will exempt from its scope Carlyle, and any of its direct or indirect transferees and any group as to which such persons or entities are a party.

In addition, Carlyle currently has the right to designate eightsix of our nine directors and will continue to have the right to designate a majority of our directors until it owns less than 25% of our outstanding shares of common stock.

Our amended and restated certificate of incorporation provides that, to the fullest extent permitted by law, none of Carlyle, the GIC Investor or any of their affiliates or any director who is not employed by us (including any non-employee director who serves as one of our officers in both his director and officer capacities) or his or her affiliates has any duty to refrain from (i) engaging in a corporate opportunity in the same or similar lines of business in which we or our affiliates now engage or propose to engage or (ii) otherwise competing with us or our affiliates. In addition, to the fullest extent permitted by law, in the event that Carlyle, the GIC Investor or any non-employee director acquires knowledge of a potential transaction or other business opportunity which may be a corporate opportunity for itself or himself or its or his affiliates or for us or our affiliates, such person will havehas no duty to communicate or offer such transaction or business opportunity to us or any of our affiliates and they may take any such opportunity for themselves or offer it to another person or entity. For example, a director of our company who also serves as an officer, director, employee, agent, stockholder, member, partner or affiliate of Carlyle or its affiliates, or any of their respective portfolio companies or affiliated funds may pursue certain acquisitions or other opportunities that may be complementary to our business and, as a result, such acquisition or other opportunities may not be available to us. These potential conflicts of interest could have a material adverse effect on our business, financial condition, results of operations or prospects if attractive corporate opportunities are allocated by Carlyle or the GIC Investor to itself or its affiliates or its respective portfolio companies or affiliated funds instead of to us.

Our amended and restated certificate of incorporation and amended and restated bylaws requires,require, to the fullest extent permitted by law, that (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed to us or our stockholders by any of our directors, officers, employees or agents, (iii) any action asserting a claim against us arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or our amended and restated bylaws, or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine will have to be brought only in the Court of Chancery of the State of Delaware (or the federal district court for the District of Delaware or other state courts of the State of Delaware if the Court of Chancery in the State of Delaware does not have jurisdiction). Our amended and restated certificate of incorporation and amended and restated bylaws will also require that the federal district courts of the United States of America will beare the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act; however, there is uncertainty as to whether a court would enforce such provision, and investors cannot waive compliance with federal securities laws and the rules and regulations thereunder. These provisions woulddo not apply to any suits brought to enforce any liability or duty created by the Exchange Act, or any other claim for which the federal courts of the United States have exclusive jurisdiction, subject to applicable law.

As of December 31, 2024,2025, we had U.S. federal and state disallowed interest expense carryforwards under Section 163(j) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), of approximately $824.0$786.0 million ($187.5$185.6 million tax effected). Our ability to utilize our disallowed interest expense carryforwards (the “Tax Attributes”) may become limited under Section 382 of the Code. The limitation applies if we experience an “ownership change,” which is generally defined as a greater than 50 percentage point change (by value) in the ownership of our equity by certain stockholders over a rolling three-year period. The amount of the annual limitation is generally equal to the product of the applicable long-term tax exempt-rate (as published by the IRS for the month in which the “ownership change” occurred) and the value of our outstanding stock immediately prior to the “ownership change.” If we have a net unrealized built-in gain in our assets immediately prior to the “ownership change,” the annual limitation may be increased as certain gains are, or are treated as, recognized during the five-year period beginning on the date of the “ownership change.”

The following is a discussion and analysis of, and a comparison between, our results of operations for the years ended December 31, 20242025 and 2023.2024. AFor a discussion and analysis of, and a comparison between, our results of operations for the years ended December 31, 20232024 and 20222023 canrefer beto foundPart inII, theItem section entitled,7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our final prospectus on Form 424(b)(3)10-K filed with the SEC on OctoberMarch 2,12, 2024.2025.

The number of aircraft in operation and the utilization of those aircraft are generally tied to global air travel over the long-term, which has historically grown in excess of GDPgross domestic product driven by secular tailwinds such as globalization, rising middle class population and wealth, increasing demand for leisure travel, growth in corporate earnings and e-commerce and technological advancements in aviation. The age and utilization of the existing installed base have increased as supply chain issues and regulatory constraints delay the delivery of new aircraft. Engine aftermarket services demand is also expected to further increase through the remainder of the decade due to upcoming shop visits resulting from a large number of engines delivered in the 2010s continuing to age and entering prime maintenance periods. In the military and helicopter end market, ongoing geopolitical tensions continue to drive significant defense investment. In the business aviation end market, this strong fleet growth is expected to drive a continued increase in demand for business jet engine maintenance services.

While the recent supply chain disruptions across our end markets are causing older aircraft and engines to remain in service longer and increasing their maintenance demand, our business also depends on maintaining a sufficient supply of parts, components and raw materials to meet the requirements of our customers. In recent years, we have experienced supply chain delays that impacted the availability of parts and ultimately engine throughput across all of our end markets. Any disruption to our supply chain and business operations, or to our suppliers’ supply chains and business operations, could have adverse effects on our ability to provide aftermarket support to our customers timely and efficiently and may increase our working capital as we wait for parts for the engines we service. Any such disruptions could adversely affect our business, results of operations and financial condition. See “Part I. Item 1A. Risk Factors—Risks Related to Our Business and Industry—We depend on certain component parts and material suppliers for our engine repair and overhaul operations, and any supply chain disruptions or loss of key suppliers could adversely affect our business, results of operations and financial condition.” In addition, the Company continues to closely monitor the implementation of tariffstariffs, which has the potential to disrupt global trade and existing supply chains and impose additional costs on our business. While negotiations regarding tariffs are ongoing, if the resulting environment of retaliatory tariffs or other practices of additional trade restrictions or barriers require us to increase prices for our products or services, this could lead to decreased demand for our products and services, which would negatively impact our results of operations, cash flows, and financial condition. While tariff levels and related trade actions remain fluid, we expect to pass associated cost increases through to customers where possible, though timing delays may impact margins. However, factors such as the Company’s operations and supply chains, which are primarily located in regions where our products are sold, along with the applicability of the United States-Mexico-Canada Agreement, help reduce our exposure to trade disruptions, but there can be no assurance that these factors, or our pricing actions, will be effective mitigants given the uncertain environment. Most recently, in February 2026, the United States Supreme Court ruled that the use of IEEPA to impose tariffs was not authorized by Congress, invalidating a significant portion of tariffs that had been in effect since April 2025. While the ruling struck down the IEEPA-based tariffs, it does not prevent the administration from imposing tariffs using other legal authorities, and the administration has indicated its intention to pursue alternative statutory mechanisms to reinstate or impose new tariffs. See “Part I.I, Item 1A. Risk Factors—Risks Related to Our Business and Industry—United States trade policies that restrict imports or increase import tariffs may have a material adverse effect on our business.”

On October 2, 2024, the Company completed its initial public offering (“IPO”) of ordinary shares at a price to the public of $24.00 per share.share (“Common Stock”). The offering included 69,000,000 registeredshares ordinaryof shares,Common Stock, of which, the Company issued and sold 53,250,000 ordinary shares and the selling existing stockholders sold 15,750,000 ordinary shares, including 9,000,000 ordinary shares issued pursuant to the full exercise of the Underwriters'underwriters’ option to purchase additional shares from the selling existing stockholders. The ordinaryshares sharesof Common Stock sold in the IPO were registered under the Securities Act pursuant to a Registration Statement on Form S-1 (the “IPO Registration Statement”),S-1, which was declared effective by the SEC on October 1, 2024. The IPO generated net proceeds from the primary issuance of shares of $1,202.8 million after deducting underwriting discounts and commissions of approximately $67.1 million and estimated offering expenses of $8.1 million.

To continue to grow our business, we are continually acquiring and investing in companies that share our common goal of providing the market with aftermarket services across multiple engine platforms. During the years ended December 31, 2024, and December 31, 2023, we acquired the following entities:

On August 23, 2024, we acquired Aero Turbine, Inc. ("“Aero Turbine"”), a provider of engine component repair and other value-added engine aftermarket services for U.S. and international customers for an estimated purchase price of approximately $132.0 million, comprising an initial cash purchase price of $116.8 million and $15.2 million representing the estimated fair value of additional consideration contingently payable based upon the achievement of gross profit in excess of certain gross profit targets for the period from January 1, 2024, to December 31, 2026, subject to post-closing adjustments. The maximum contingent consideration payable from the Company to the seller is $21.0 million. The acquisition was funded with borrowings under the Prior ABL Credit Facility, which was repaid on September 6, 2024 with incremental borrowings from the Prior 2024 Term B-1 Loan B-1 Facility and the Prior 2024 Term B-2 Loan B-2 Facility.

We have incurred, and expect to continue to incur, certain non-recurring professional fees and other expenses as part of our transition to a public company.company not recurring in the ordinary course of business. As a public company, we are implementing additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies, for which we expect to incur additional recurring expenses. In particular, our accounting, legal and personnel-related expenses and directors’ and officers’ insurance costs have increased as we establish more comprehensive compliance and governance functions, establish, maintain and review internal control over financial reporting in accordance with the Sarbanes-Oxley Act and prepare and distribute periodic reports in accordance with SEC rules. Our financial statements following ourthe initialIPO publichave offeringreflected and will continue to reflect the impact of these expenses. See “Part I. Item 1A. Risk Factors—Risks Related to Management and Employees—The requirements of being a public company may strain our resources, increase our costs, divert management’s attention, and affect our ability to attract and retain executive management and qualified board members.”

We define Adjusted EBITDA as net income (loss) before interest expense, income tax expense, depreciation and amortization, further adjusted for certain non-cash items that we may record each period, as well as non-recurringitems itemsnot recurring in the ordinary course of business such as acquisition costs, integration and severance costs, refinancing fees, business transformation costs and other discrete expenses, when applicable. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue. We believe that Adjusted EBITDA and Adjusted EBITDA Margin are important metrics for management and investors as they remove the impact of items that we do not believe are indicative of our core operating results or the overall health of our company and allows for consistent comparison of our operating results over time and relative to our peers.

The following table presents a reconciliation of net income (loss)and net income margin to Adjusted EBITDA and Adjusted EBITDA MarginMargin, respectively for the years ended December 31, 2025 and 2024:

Represents transaction costs incurred in connection with planned and completed acquisitions, including legal and professional fees, debt arrangement fees and other third-party costs.

Represents other non-recurring costs not recurring in the ordinary course of business including professional fees related to business transformation and quarterly management fees payable to Carlyle Investment Management L.L.C. and Beamer Investment Inc. under consulting services agreements, representation and warranty insurance costs associated with acquisitions, and other non-comparable events to measure operating performance as these events arise outside of ourthe Company’s ordinary course of continuing operations. See Note 17, "Related Party Transactions" to ourthe Company’s condensed consolidated financial statements included elsewhere in this reportAnnual Report on Form 10-K for descriptions of the consulting services agreements with Carlyle Investment Management L.L.C. and Beamer Investment Inc.

Revenue consists of gross sales principally resulting from the engine and component repair services that we perform for commercial, military and business aviation fixed wing and rotary wing aircraft engines, as well as aeroderivative engines for the land and marine and other markets. Within these end markets, our Engine Services segment primarily provides a variety of value-added services in support of the maintenance, repair, testing and recertification of aerospace and aeroderivative engines. Our Component Repair Services segment supports commercial aerospace, military aerospace, business aviation, land and marine and other markets with engine piece part repair and accessory repair.

Acquisition costs primarily consist of professional service fees and other third-party costs incurred as part of the transaction process. Acquisition costs do not include any costcosts associated with the issuance of debt as these are capitalized and amortized over the term of the debt.

Refinancing costs primarily consists of costs incurred for the amendments to the Prior Credit Agreement in March 2024 and September 2024 and August 2023,2024, and costs incurred for the New Credit Agreement in October 2024.

Loss on debt extinguishments primarily consists of the write-off of unamortized charges related to the extinguished portions of the Prior 2023 and Prior 2024 Term Loan Facilities, the Prior ABL Credit Facility and the redemptionredeemed portions of the Prior Senior Notes.

Our provision for income tax expense (benefit) is based on permanent book/tax differences and statutory tax rates in the various jurisdictions in which we operate. Significant estimates and judgments are required in determining the provision for income taxes.

Cost of revenue. Cost of revenue increased $555.0$682.0 million, or 14.1%,15.2%, to $5,165.1 million for the year ended December 31, 2025 from $4,483.0 million for the year ended December 31, 2024 from $3,928.0 million for the year ended December 31, 2023.2024. This increase was driven by a growth in volumes, which drove corresponding higher material and direct labor expenses, as well as increased other overhead costs directly related to the performance of aftermarket services.services, in addition to the cost of revenue attributable to the acquisition of Aero Turbine on August 23, 2024.

Amortization of intangible assets. Amortization of intangible assets was $95.4$98.7 million and $93.7$95.5 million for the years ended December 31, 20242025 and 2023,2024, respectively. The increase isof $3.2 million, or 3.4%, was primarily driven by the intangible assets allocated to customer relationships resulting from the Aero Turbine acquisition on August 23, 2024. During the year ended December 31, 2024, the cost base of customer relationships increased due to the Aero Turbine acquisition; however, this had minimal impact on total amortization expense due to the timing of the transaction.

Acquisition costs. Acquisition costs of $1.4 million for the year ended December 31, 2024 were incurred primarily due to the acquisition of Aero Turbine acquisition on August 23, 2024. AcquisitionThere costshave ofbeen $1.5no millionacquisitions forduring the year ended December 31, 2023 were incurred primarily due to the acquisition of Western Jet Aviation on February 2, 2023.2025.

Interest expense. Interest expense wasdecreased $108.3 million, or 38.3%, from $282.5 million and $309.6 million for the yearsyear ended December 31, 2024 andto 2023,$174.2 respectively.million Thefor the year ended December 31, 2025. This decrease in interest expense iswas attributablelargely todriven by (i) the repayment of $200.0 million on the Prior Senior Notes in Marchfull 2024,on (ii)October the3, repayment of the remaining balance of the Prior Senior Notes2024 concurrent with the IPOCompany’s in October 2024,IPO, and (iiiii) entrance into the refinancingNew ofCredit Agreement on October 31, 2024 providing for the PriorNew 20232024 Term Loan Facilities and the New 2024 Revolving Credit Facility and the use of the proceeds to repay in full amounts outstanding under the Prior TermCredit LoanAgreement and the Prior ABL Credit Agreement, terminating each of the debt facilities thereunder, and, resulting in a weighted average interest rate of borrowings for the yearsyear ended December 31, 2024 and 20232025 of 6.8% compared to 8.7% and 9.2%, respectively, asfor the underlyingyear benchmarkended ratesDecember on31, our floating rate debt instruments continued to decline during 2024, which, along with the repayment of indebtedness with the proceeds of our IPO, drove the lower interest expense in the year.2024. See “—Liquidity and Capital Resources” for further discussion of our debt and financing activities.

Loss on debt extinguishments. A $15.3 million loss on debt extinguishments was recorded during the year ended December 31, 2024, $8.6 million due to the redemption of the Prior Senior Notes, $4.3 million due to the extinguishment of the Prior 2023 and Prior 2024 Term Loan Facilities, $2.0 million due to the extinguishment of the Prior ABL Credit Facility and $0.4 million due to the extinguishment of the Prior 2023 Revolving Credit Facility. A $6.2 million loss on debt extinguishments was recorded during the year ended December 31, 2023, due to the write-off of unamortized deferred finance charges and debt discount related to the extinguished portion of the 2019Prior 2023 Term Loan Facilities and 2021redeemed Termportion Loanof Facilitythe (bothPrior definedSenior below)Notes related to the refinancing activity.activity, with no similar charges incurred in the year ended December 31, 2025.

Income tax expense. Income tax expense was $99.4 million for the year ended December 31, 2025, as compared to $70.8 million for the year ended December 31, 2024,2024. asThis compared to $40.2 million for the year ended December 31, 2023,was an increase of $30.6$28.7 million.million, Ofor this40.5%. increase,This $22.2increase millionin tax expense was drivendue byprimarily to the increase in pre-taxthe income.pretax Inincome addition,which $5.23was $376.9 million relatedat December 31, 2025 compared to an adjustment to our state deferred tax rate and $2.5$81.8 million relatedat toDecember non-deductible31, officer2024, compensation.which is an increase of $295.1 million. The tax expenseexpense, and corresponding effective tax raterates for 2024the years ended December 31, 2025 and 20232024, were highhigher than the statutory rate of 21.0% primarily due to State income taxes and the Global Intangible Low-taxed Income (“GILTI”) provision which was enacted in 2017 as part of the Tax Cuts and Jobs ActAct. asFurther, wellfor asthe year ended December 31, 2024, the partial valuation allowance recorded against our interest expense carryforward deferred tax asset under Section 163(j) of the Internal Revenue Code.Code also was a driver of the effective tax rate exceeding the statutory rate.

For a discussion of Segment Adjusted EBITDA, see Note 24, "Segment Information" to our condensed consolidated financial statements included in this Annual Report.

Component RepairEngine Services Segment Adjusted EBITDA increased $29.4$96.0 million, or 23.5%,15.7%, to $154.7$706.9 million for the year ended December 31, 2025, from $610.9 million for the year ended December 31, 2024. TheAdjusted increaseEBITDA margin of 13.2% was primarilyin line with the prior year period, driven by increases in revenuemix and improved productivity offset by the acquisitioneffect of Aeroramping Turbine.volumes on our new LEAP and CFM56 DFW Center of Excellence programs which are still coming down the learning curve.

Includes unamortized discounts of $22.5$19.2 million and $26.9$22.5 million as of December 31, 20242025 and 2023,December 31, 2024, respectively, and unamortized deferred finance charges of $15.7$13.4 million and $33.6$15.7 million as of December 31, 20242025 and 2023,December 31, 2024, respectively.

Our principal historical cash requirements have been to fund working capital, capital expenditures and acquisitions and to service our indebtedness. As of December 31, 2024,2025, we had $837.7$1,025.6 million of available liquidity, consisting of $102.6$289.7 million cash on hand,hand $735.1and, $735.9 million available under the New 2024 Revolving Credit Facility. Based on our current operations, we believe that our current sources of liquidity, including cash on hand and the New 2024 Revolving Credit Facility, are adequate to meet our cash requirements for the next twelve months and for the foreseeable future. See Note 12, “PartLong-Term II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—New Credit AgreementDebt” for further discussion of the New Credit Agreement and New Senior Secured Credit Facilities. However, our ability to make scheduled payments of principal and interest, refinance our debt, comply with the financial covenants under our debt agreements and fund our other liquidity requirements will depend on our ability to generate cash in the future, which is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Any future acquisitions, joint ventures or other similar transactions may require additional capital and there can be no assurance that any such capital will be available to us on acceptable terms, if at all.

The $750.0 million New 2024 Revolving Credit Facility under the New Credit Agreement, under which we had no outstanding borrowings, maturing on October 31, 2029.indebtedness.

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes thereto included in this Quarterly Report and our audited consolidated financial statements and related notes thereto for the year ended December 31, 2025, included in our 2025 Form 10-K. Some of the information included in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties you should review about our business. Our future results and financial condition may differ materially from those we currently anticipate. You should review the “Cautionary Note Regarding Forward-Looking Statements” section of this Quarterly Report and the “Risk Factors” section of our 2025 Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. For purposes of this section, references to the “Company,” “we,” “us,” and “our” refer to StandardAero, Inc. and its subsidiaries.

The number of aircraft in operation and the utilization of those aircraft are generally tied to global air travel over the long-term, which has historically grown in excess of gross domestic product driven by secular tailwinds such as globalization, rising middle class population and wealth, increasing demand for leisure travel, growth in corporate earnings and e-commerce and technological advancements in aviation. The age and utilization of the existing installed base have increased as supply chain issues and regulatory constraints delay the delivery of new aircraft. Engine aftermarket services demand is also expected to further increase through the remainder of the decade due to upcoming shop visits resulting from a large number of engines delivered in the 2010s continuing to age and entering prime maintenance periods. In the military and helicopter end market, ongoing geopolitical tensions continue to drive significant defense investment. In the business aviation end market, this strongcontinued fleet growth is expected to drive a continuedan increase in demand for business jet engine maintenance services.

While the recent supply chain disruptions across our end markets are causing older aircraft and engines to remain in service longer and increasing their maintenance demand, our business also depends on maintaining a sufficient supply of parts, components and raw materials to meet the requirements of our customers. In recent years, we have experienced supply chain delays that impacted the availability of parts and ultimately engine throughput across all of our end markets. Any disruption to our supply chain and business operations, or to our suppliers’ supply chains and business operations, could have adverse effects on our ability to provide aftermarket support to our customers timely and efficiently and may increase our working capital as we wait for parts for the engines we service. Any such disruptions could adversely affect our business, results of operations and financial condition. See “Part I. Item 1A. Risk Factors—Risks Related to Our Business and Industry—We depend on certain component parts and material suppliers for our engine repair and overhaul operations, and any supply chain disruptions or loss of key suppliers could adversely affect our business, results of operations and financial condition” in our 2025 Form 10-K. In addition, the Company continues to closely monitor the implementation of tariffs, which has the potential to disrupt global trade and existing supply chains and impose additional costs on our business. While negotiations regarding tariffs are ongoing, if the resulting environment of retaliatory tariffs or other practices of additional trade restrictions or barriers require us to increase prices for our products or services, this could lead to decreased demand for our products and services, which would negatively impact our results of operations, cash flows, and financial condition. While tariff levels and related trade actions remain fluid, we expect to pass associated cost increases through to customers where possible, though timing delays may impact margins. However, factors such as the Company’s operations and supply chains, which are primarily located in regions where our products are sold, along with the applicability of the United States-Mexico-Canada Agreement, help reduce our exposure to trade disruptions, but there can be no assurance that these factors, or our pricing actions, will be effective mitigants given the uncertain environment. Most recently, in February 2026, the U.S. Supreme Court ruled that the use of IEEPA to impose tariffs was not authorized by Congress, invalidating a significant portion of tariffs that had been in effect since April 2025. While the ruling struck down the IEEPA based tariffs, it does not prevent the administration from imposing tariffs using other legal authorities, and the administration has indicated its intention to pursue alternative statutory mechanisms to reinstate or impose new tariffs. See “Part I, Item 1A. Risk Factors—Risks Related to Our Business and Industry—United States trade policies that restrict imports or increase import tariffs may have a material adverse effect on our business” in our 2025 Form 10-K.

In March 2025, two of the Company’sour stockholders (the “Selling Stockholders”), affiliates of The Carlyle Group Inc. (“Carlyle”) and GIC Private Limited (“GIC”), completed a public offering of an aggregate of 36,000,000 shares of Common Stock at a price to the public of $28.00 per share. The Selling Stockholders received all of the net proceeds from this offering. No shares were sold by the Company.

On January 29, 2026, the Companywe completed the repurchase of 1,637,465 shares of Common Stock from a selling stockholder affiliated with GIC (the “GIC Stockholder”) in a private transaction at a price of $30.54 per share (the “Share Repurchase”). The Share Repurchase was made pursuant to the Company’sour existing stock repurchase program approved by itsour board of directors in December 2025 and pursuant to a stock purchase agreement, dated January 20, 2026, with the GIC Stockholder. The Share Repurchase was conditioned upon the completion of the January 2026 Offering and closed concurrently with such offering. The repurchased shares of Common Stock are no longer outstanding.

As of MarchJune 31,30, 2026, Carlyle and GIC own approximately 25.5% and 5.8% of the Company’s outstanding Common Stock, respectively.

The non-GAAP financial measures presented in this Quarterly Report are supplemental measures of our performance that we believe help investors understand our financial condition and operating results and assess our future prospects. We believe that presenting these non-GAAP financial measures, in addition to the corresponding GAAP financial measures, are important supplemental measures that exclude non-cash or other items that may not be indicative of or are unrelated to our core operating results and the overall health of our company. We believe that these non-GAAP financial measures provide investors greater transparency tointo the information used by management for its operational decision-making and allow investors to see our results “through the eyes of management.” We further believe that providing this information assists our investors in understanding our operating performance and the methodology used by management to evaluate and measure such performance. When read in conjunction with our GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in our underlying businesses and can be used by management as one basis for financial, operational and planning decisions. Finally, these measures are often used by analysts and other interested parties to evaluate companies in our industry.

Management recognizes that these non-GAAP financial measures have limitations, including that they may be calculated differently by other companies or may be used under different circumstances or for different purposes, thereby affecting their comparability from company to company. In order to compensate for these and the other limitations discussed below, management does not consider these measures in isolation from or as alternatives to the comparable financial measures determined in accordance with GAAP. Readers should review the reconciliations below and should not rely on any single financial measure to evaluate our business. TheSee below for the reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures follow.measures.

We define Adjusted EBITDA as net income before interest expense, income tax expense, depreciation and amortization, further adjusted for certain non-cash items that we may record each period, as well as items not recurring in the ordinary course of business such as acquisition costs, integration and severance costs, refinancing fees, business transformation costs and other discrete expenses, when applicable. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue. We believe that Adjusted EBITDA and Adjusted EBITDA Margin are important metrics for management and investorsinvestors, as they remove the impact of items that we do not believe are indicative of our core operating results or the overall health of our company and allows for consistent comparison of our operating results over time and relative to our peers.

The following table presents a reconciliation of net income and net income margin to Adjusted EBITDA and Adjusted EBITDA Margin, respectively for the three months ended March 31, 2026 and 2025:

Represents other costs not recurring in the ordinary course of business including professional fees related to business transformation and quarterly management fees payable to Carlyle Investment Management L.L.C. and Beamer Investment Inc. under consulting services agreements, representation and warranty insurance costs associated with acquisitions,acquisitions and other non-comparable events to measure operating performance as these events arise outside of the Company’s ordinary course of continuing operations. See Note 12,13, "“Related Party Transactions"” to the Company’s condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for descriptions of the consulting services agreements with Carlyle Investment Management L.L.C. and Beamer Investment Inc.

Interest expense primarily consists of interest on our debt obligations, including the amortization of debt discount and deferred finance charges. Interest expense also includes the portion of the gain or loss on our interest-rateinterest rate swap and interest-rateinterest rate cap agreements that is reclassified into earnings.

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

The following table sets forth our consolidated statements of operations data for the three months ended MarchJune 31,30, 2026 and 2025:

Revenue. Revenue increased $191.3$70.8 million, or 13.3%,4.6%, to $1,626.9$1,599.7 million for the three months ended MarchJune 31,30, 2026 from $1,435.6$1,528.9 million for the three months ended MarchJune 31,30, 2025. The increase was driven by continued strong demand forin our servicescommercial aerospace and products across all three major end markets. The business aviation businesses, partially offset by the previously announced elimination of low-to-no margin material pass-through revenue on restructured contracts and lower military sales at our Component Repairs Services segment. The Commercial Aerospace end market grew 19.6%5.7% compared to the prior year period, the commercialBusiness aerospaceAviation end market grew 11.4%5.6% compared to the prior year period, and the militaryMilitary and helicopterHelicopter end market grewdecreased 10.3%,2.6%, compared to the prior year period.

Cost of revenue. Cost of revenue increased $169.6$38.1 million, or 13.9%,3.0%, to $1,387.5$1,330.9 million for the three months ended MarchJune 31,30, 2026 from $1,217.9$1,292.8 million for the three months ended MarchJune 31,30, 2025. This increase was primarily driven by higher sales volume, as revenue increased 4.6% compared to the prior year period. The lower year-over-year growth rate in cost of revenue compared to revenue reflects in part lower material costs as a percentage of revenue,revenue duefrom tothe increased sales volumeelimination of lowerlow-to-no margin platforms.material pass-through revenue on restructured contracts.

The following table sets forth our total cost of revenue for the three months ended MarchJune 31,30, 2026 and 2025:

Selling, general and administrative expense. SG&A expense was $71.9$75.6 million and $64.5$76.0 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and was 4.4%4.7% and 4.5%5.0% of revenue for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The $7.5$0.4 million or 11.6%0.5% increasedecrease in SG&A expense for the three months ended June 30, 2026 was primarily due to a $3.5 million loss on disposal and professional services fees related to the May secondary offering incurred in the prior year period, partially offset by increased personnel expenses related to bonuses and increased headcount.

Amortization of intangible assets. Amortization of intangible assets was $24.3$24.7 million and $24.3$24.6 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively.

Interest expense. Interest expense decreased $5.6$2.5 million, or 12.9%,5.8%, from $43.8 million for the three months ended MarchJune 31,30, 2025 to $38.2$41.3 million for the three months ended MarchJune 31,30, 2026. This decrease in interest expense was largely driven by a weighted average interest rate of borrowings for the three months ended MarchJune 31,30, 2026 of 6.2%6.1% compared to 7.1%6.8% for the three months ended MarchJune 31,30, 2025. See “—Liquidity and Capital Resources” for further discussion of our debt and financing activities.

Income tax expense. Income tax expense was $25.0$29.9 million for the three months ended MarchJune 31,30, 2026, as compared to $22.2$24.0 million for the three months ended MarchJune 31,30, 2025, an increase of $2.8$5.9 million, or 12.7%.24.6%. This increase in income tax expense is primarily due to an increase in year-to-date pretax income. Year-to-datepre-tax income before taxeswhich, for the periodthree endingmonths Marchended 31,June 202630, 2026, increased to $104.9$127.2 million as compared to $85.1$91.7 million for the three months ended MarchJune 31,30, 2025. The income tax expense,expense and corresponding estimated effective tax rate for the three months ended MarchJune 31,30, 2026 and 2025,2025 were higher than the statutory rate of 21.0%21% primarily due to non-deductible expenses and state taxes. Additionally, for the three months ended MarchJune 31,30, 2025, the effective rate was higher than the statutory rate due to the Global Intangible Low-tax Income (“GILTI”) provision. Effective January 1, 2026, the One Big Beautiful Bill Act (the “OBBBA”) eliminates the requirements to allocate interest expense against Net CFC Testedtested Incomeincome ("“NCTI"”, formerly GILTI). As a result, we are utilizing foreign tax credits to offset NCTI.

Segment ResultsResult

Engine Services segment revenue increased $178.8$54.4 million, or 14.1%,4.0%, to $1,447.1$1,405.1 million for the three months ended MarchJune 31,30, 2026, compared to $1,268.3$1,350.7 million for the three months ended MarchJune 31,30, 2025. The increase was driven primarily by acontinued strong ramp in ouryear-over-year growth platforms,across includingall LEAPthree andmajor CFM56,end alongmarkets, withoffset continuedby momentumthe elimination of low-to-no margin material pass-through revenues on otherrestructured key commercial, military, and business aviation platforms.contracts.

Engine Services Segment Adjusted EBITDA increased $4.6$25.7 million, or 2.7%,14.4%, to $178.6$204.2 million for the three months ended MarchJune 31,30, 2026, from $174.0$178.5 million for the three months ended MarchJune 31,30, 2025.The2025. The increase was driven by volume andvolume, productivity gains, partiallyand offset by the timing of engine shipments in the quarter.mix. Segment Adjusted EBITDA Margin of 12.3%14.5% decreasedincreased compared to 13.7%13.2% in the prior year period driven by mixproductivity includinggains, the elimination of material pass-through revenue, and mix, offset partially by the continued ramp in the LEAP and CFM56 DFW,DFW compared to the previous year's period.programs.

Component Repair Services segment revenue increased $12.4$16.3 million, or 7.4%,9.2%, to $179.7$194.6 million for the three months ended MarchJune 31,30, 2026, compared to $167.3$178.3 million for the three months ended MarchJune 31,30, 2025. The increase was driven by continued robuststrong demand on key commercial aerospace products,products and aeroderivative platforms, which were partially offset by softnesslower inrevenues theon certain military endplatforms marketdue fromto the delayed effect of the U.S. Government shutdown in the previous quarter.timing.

Component Repair Services Segment Adjusted EBITDA increaseddecreased $5.0$0.4 million, or 10.6%,0.9%, to $52.4$51.2 million for the three months ended MarchJune 31,30, 2026, from $47.4$51.6 million for the three months ended MarchJune 31,30, 2025. Segment Adjusted EBITDA Margin of 29.2%26.3% decreased compared to 28.3%29.0% in the prior year period, driven primarily by pricing,negative mix and improved productivity.mix.

The following table summarizes select financial data relevant to our liquidity and capital resources as of MarchJune 31,30, 2026 and December 31, 2025:

Includes unamortized discounts of $18.3$17.5 million and $19.2 million as of MarchJune 31,30, 2026 and December 31, 2025, respectively, and unamortized deferred finance charges of $12.8$12.3 million and $13.4 million as of MarchJune 31,30, 2026 and December 31, 2025, respectively.

Our principal historical cash requirements have been to fund working capital, capital expenditures and acquisitions and to service our indebtedness. As of MarchJune 31,30, 2026, we had $825.2$792.7 million of available liquidity, consisting of $89.2$179.1 million cash on hand and, $736.0$613.6 million available under the 2024 Revolving Credit Facility. Based on our current operations, we believe that our current sources of liquidity, including cash on hand and availability under the 2024 Revolving Credit Facility, are adequate to meet our cash requirements for the next twelve months and for the foreseeable future. See Note 7,8, “Long-Term Debt” for further discussion of the Credit Agreement and Senior Secured Credit Facilities. However, our ability to make scheduled payments of principal and interest,interest on our debt, refinance our debt, comply with the financial covenants under our debt agreements and fund our other liquidity requirements will depend on our ability to generate cash in the future, which is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Any future acquisitions, joint ventures or other similar transactions may require additional capital and there can be no assurance that any such capital will be available to us on acceptable terms, if at all.

As of MarchJune 31,30, 2026 and December 31, 2025, our debt outstanding consisted of the following:

As of MarchJune 31,30, 2026, we had the following debt agreementsoutstanding:

The 2024 Term Loan Facilities under the Credit Agreement, under which we had outstanding indebtedness in an aggregate principal amount of $2,221.9$2,216.3 million, maturing on October 31, 2031.2031; and The $750.0 million 2024 Revolving Credit Facility under the Credit Agreement, under which we had outstanding indebtedness of $120.0 million; and $18.7 million in finance leases and other debt.

The Credit Agreement contains certain financial reporting covenants that require us to present periodic financial metrics to our lenders. One such financial reporting metric is Consolidated EBITDA as defined in the Credit Agreement. The definition of Consolidated EBITDA utilized for these debt reporting covenants differs from the definition of Adjusted EBITDA presented in this Quarterly Report in that it represents Adjusted EBITDA as further adjusted for certain additional items, as set forth in the Credit Agreement. The table below highlights the differences between Adjusted EBITDA presented in this Quarterly Report and Consolidated EBITDA as defined in the Credit Agreement and presented to our creditors:

As of MarchJune 31,30, 2026, we were in compliance with the covenants in the Credit Agreement.

The following table summarizes our cash flows for the threesix months ended MarchJune 31,30, 2026 and March 31, 2025:

ThreeSix Months Ended MarchJune 31,30, 2026